The flippening is when Ethereum has more market share - number of coins times the price - than Bitcoin
In the orange corner sits the champion, Bitcoin. Satoshi seems very confident and throws his arms a little loose. In the gray corner there is Ethereum, the challenger. Vitalik does not seem entirely at ease and twists his neck up and down a bit, as if there is some tension on it. The referee walks to the center and calls the players to him. No punches below the belt, no headbutts and no hanging. Satoshi looks as if the referee has told him his laces are loose. Vitalik looks fierce, as if to say, "I do no such things!" The referee brings the two together and they briefly tap the boxing gloves of each other.
Table of Contents
- The first round
- The second round
- The third round
- The fourth round
- The fifth round
- Bitcoin vs Ethereum the flippening
The first round
In those times, figures above 90% market dominance in terms of market cap are quite common for Bitcoin. There is hardly any money invested in the crypto world around this time, often under 1 billion euros.
Bitcoin is king. Satoshi gets the belt but does not even bother to raise his arms. "For amateurs, we have no place in the ring," he growls.
The second round
In 2013, Vitalik finally walks back into the ring with a white paper. "Is that a submission?" asks Satoshi?
Vitalik grins slyly once. "This is the beginning of the end for you!" he asserts.
In 2015, Ethereum is only beginning to gain decent market share. It starts at 1%, while Bitcoin is still at about 90% at that time. Over the course of that year, it rises to 10% before dropping to 5% by 2017. Satoshi looks on amused as he takes another sip of water.
In mid-2017, something special happens: there is almost a flippening! Ethereum is fast approaching Bitcoin, with Bitcoin at 37.5% and Ethereum at 29.5% market share. Vitalik has Satoshi in the corner, but the referee intervenes and claims that Vitalik is "clamping down" on Satoshi.
After this, the market share of Ethereum drops sharply and remains stable around 15% for a long time, caused by a right direct from Satoshi.
In the now legendary "crazy days of crypto," in early 2018, the prices of many coins skyrocket, with Bitcoin just barely managing to hold a market share of around 35% and Ethereum around 18%. The referee is hereby exposed and appears to have been a pawn of XRP, which reaches a market share as high as 10% in these days. The referee is dismissed for bias.
They fight on with a new ref until 2018 and then fall back wearily into the corner. Satoshi may have won this round on points, but it was no walkover.
Satoshi smiles at Vitalik in a way that could mean anything, but probably as a sign of respect. Given the look of Vitalik, it is mutual.
During this period, both cryptocurrencies grow like cabbage, but Ethereum (x1000) grows faster than Bitcoin (x300). The total market capitalization reaches around 1000 billion in this year.
The third round
Now that the fight has picked up steam and the brawlers have become a bit more cautious, we see that the growth of the price of the two is slowing down a bit.
In 2018 and 2019, Satoshi deals hit after hit. XRP, which now no longer receives support from the referee, drops to 5%, while Ethereum must also concede the strength of Satoshi. It drops to below 10% and appears to be going after XRP. Bitcoin dominance at the end of 2020 is around 70%. The king is back!
In early 2021, Vitalik has found a weakness in the defense of Satoshi: the jab to the body, under the raised gloves. Satoshi does box on, but regularly lies gasping for breath. Nevertheless, Bitcoin reaches a milestone during this period: for the first time, this cryptocurrency reaches a market value of more than a thousand billion dollars.
In those intervals, several coins seize their chance and Bitcoin dominance drops to a mere 39%. Ethereum rises to just under 19% and all sorts of altcoins emerge from the fog, such as BNB, ADA and Dogecoin. The top ten has suddenly become a serious club with significant market share.
Over the period 2018 - 2022, we see that Bitcoin was worth 20x as much at the peak of the bull market as it was at the end of 2018. Ethereum surpassed Bitcoin again, with a phenomenal run of x50 in the same period.
Satoshi walks out of the ring with his hands up, but with a grim face. His market cap is still the highest, but you can see him thinking, "How much longer?"
Vitalik came to warmly congratulate him on his Pyrrhus victory: "Well done, old boy, keep them in the air as long as you can hold out!"
The fourth round
This is the round we are in now. The years 2022 - 2026.
We see Vitalik and Satoshi just circling each other and feinting without throwing a single punch. The audience is on the benches, but not out of enthusiasm!
"Booh, go home! This is no fight; it is a scam! We want our money back!"
Bitcoin and Ethereum are holding each other in an iron market cap grip. They are not yielding a straw, so far. Relatively, their market share remains pretty much the same. Bitcoin has a market share of around 45% and Ethereum around 18%. The other altcoins are gradually dropping away in favor of Bitcoin.
Will Vitalik go for the knockout in this round?
My expectation is that the two will very gradually move closer together in terms of marketcap. Whether Vitalik will do the flippening (Ethereum goes over Bitcoin in marketcap) or the handstand (this is a gymnastic exercise) these four years will have to show. For now, I consider the probability present, but not yet huge.
The fifth round
2026 - ∞
Satoshi looks a little pipsqueak. The years are starting to add up, you can see it clearly. Vitalik performs his mock fight and boxes with his shadow. The referee feels the boxing gloves of Satoshi and looks at him for a moment.
Every round that the fight lasts everyone feels it coming. And there it happens! Vitalik deals a blow and Satoshi tastes the canvas.
Vitalik holds out his hand and brings him back to his feet. Mutual respect is present, as always, but this time Vitalik knows that from now on he will be the champion.
Bitcoin vs Ethereum the flippening
The boxing fight I just described is a good representation of events so far, with some speculation at the end.
There are more reasons to consider this scenario, the flipping, as the most likely:
- Prince Ethereum has always progressed more than king Bitcoin since its arrival.
- Ethereum has a hefty bevy of programmers, endlessly making improvements to their network, which Bitcoin lacks a bit.
- Ethereum has a good number of applications and great technology, while Bitcoin is kind of building on old technology, with a marginal update here and there.
- Many networks and applications depend on Ethereum, whereas with Bitcoin it is rather mundane.
- The main reason Ethereum will ever become No. 1 in market capitalization, it seems to me, is that the number of ETH is infinite and the number of BTC is at most 21 million. As time goes on, this will add up more and more.
There is also a possibility that there will be no flippening. There are far fewer arguments for this:
- Ethereum gets a lot of strong competition. As more people choose the alternative the value of Ethereum drops.
- Ethereum makes gross mistakes and collapses like a plum pudding. With their strong team, this seems hardly plausible.
- Bitcoin can compete with Ethereum and keeps going up in value.
Bitcoin and Ethereum are very different coins. Bitcoin is best known as a store of value and open source. Ethereum is best known as a technical coin, with their smart contracts, and as support for other networks.
Cryptocurrency is all about supply and demand. The more demand there is for a coin, the higher its price will be.
Because demand for Ethereum is likely to rise, despite dilution by more coins on the market, the price will keep going up.
Demand for Bitcoin is unlikely to slow down anytime soon, causing the price to rise little by little, but not enough to stay ahead of Ethereum.
What will happen after the flippening, if it comes, is hard to predict, but it is not out of the question that there will be a big move by Bitcoin, but not in the right direction. If Bitcoin itself becomes an altcoin it could drop significantly. Only time will tell.